Former Dorsey & Whitney partner is disbarred for collecting fees from outside clients
The Temple of Justice in Olympia, Washington, where sessions of the Washington Supreme Court are convened. Png Studio Photography / Shutterstock.com
A former nonequity partner at Dorsey & Whitney in Seattle has been disbarred for collecting more than $56,000 in fees from outside immigration clients without telling the firm about the work.
The Washington Supreme Court disbarred Carllene Placide in an April 12 opinion, report the American Lawyer, Law360 and the Legal Profession Blog.
Placide was making $225,000 a year in base salary when she collected the outside fees while working at the firm from 2006 to 2011. Dorsey had a policy that said compensation received by its lawyers belonged to the firm, and Placide had agreed to comply with law firm policies when she signed the offer of employment letter, according to the court’s opinion.
Placide didn’t disclose the outside compensation at the outset and didn’t disclose the full extent of her representations when first confronted in November 2011, according to the opinion.
“Each time the Dorsey administrators presented Placide with an e-mail or other document that showed her contact with outside clients, she would admit to representing that client, but no others,” the court said.
Placide also failed to deposit advance funds received from the outside clients in a lawyers trust account, and she couldn’t return unearned fees on at least one occasion because they weren’t held in a trust account, the court said.
Dorsey fired Placide, and she agreed in the separation agreement to repay nearly $51,000 to Dorsey. The law firm completed Placide’s work for one of the outside clients, who asked Placide to transfer his fee of more than $2,000 to the law firm, according to the opinion. Placide kept the money, however, maintaining that she didn’t have to give it to Dorsey under the separation agreement.
Placide didn’t disclose the reason she was fired when she interviewed at Ogletree, Deakins, Nash, Smoak & Stewart, the opinion said. Placide told the firm that Dorsey fired her because it learned she wanted to move her practice to Ogletree.
After joining Ogletree in December 2011, Placide collected about $10,000 in outside fees without disclosure to the law firm and without holding the fees in a trust account, the opinion said.
Ogletree confronted Placide when Dorsey revealed it had filed an ethics complaint regarding the fees. Placide at first denied representing outside clients, then admitted it when confronted with written evidence, the court said.
Placide left Ogletree in 2013 and agreed to pay the firm the outside fees she made while working there. She had not paid the money at the time of her disciplinary hearing.
The state supreme court said Placide’s retention of fees from outside clients constituted theft, as defined by the “unambiguous language” of Washington state law. Placide had met the legal definition of wrongfully obtaining property or exerting unauthorized control over the property under the law, the court said.
“We agree with the [Office of Disciplinary Counsel] and conclude that Placide’s retention of fees from outside clients, regardless of whether those clients intended to pay them directly to her, constitutes theft” as defined by the law, the court said.
Placide had claimed the outside fee issue was an “intrapartnership dispute” that wasn’t subject to discipline, a claim rejected by the Washington Supreme Court. “We now hold that engaging in extensive and repeated theft of firm funds is sanctionable attorney conduct, regardless of whether an attorney is an associate, a partner, or a shareholder,” the court said.
Placide told the ABA Journal she plans to ask the U.S. Supreme Court to hear the case. She says she will allege a lack of due process, discrimination by the bar association, and interference with her right to earn a living, among other things.
Placide says she is a West Indian black woman from Trinidad, and “the Washington State Bar Association is notorious for disbarring attorneys of color. That’s no hidden fact.”
Placide maintains the dispute over outside fees is essentially a contract dispute with the two law firms over whether she was limited in her ability to have a separate practice, and it was not a legal ethics matter. Placide said her work for the firm was not impaired by the outside matters.
Placide had sought to bolster her contract argument by introducing evidence that she had called the state bar’s advisory counsel, who said her contract with the law firm determined whether she was permitted to represent outside clients. She was not allowed to introduce the evidence.
The Washington Supreme Court upheld the hearing’s officer’s decision to exclude this evidence, citing Admission and Practice Rule 19(e)(5), which states that “no information relating to an ethics inquiry, including the fact that an inquiry has been made, its content, or the response thereto, may be asserted in response to any grievance or complaint under the applicable disciplinary rules, nor is such information admissible in any proceeding under the applicable disciplinary rules.”
Nor did she commit a crime, Placide said. “There was no theft, there was no criminal action filed against me because I didn’t steal anything,” Placide told the ABA Journal.
Placide says others at the firm, including a former managing partner, had asked her to handle work for their own individual family members, so there should have been an awareness of her outside work. She also opened a firm file acknowledging an outside practice, primarily so she could do conflicts checks, she said.
Placide said it’s not true that she denied handling outside work when confronted at Dorsey and Ogletree, though she was unable to give concrete answers about the number of cases she handled and the fees earned without her files in front of her.
She also said she did not use attorney trust accounts because she was paid flat fees for her representation, and that was the clients’ understanding. Her engagement letter “did not have the boilerplate magic language, so if they want to ding me on that I accept it,” she said.
Placide said there was one instance when it took her a few weeks to return fees to a client who wanted to put a matter on hold, but the client was not dissatisfied with her services.
Placide says Dorsey contested her outside fees because she had refused to promise that she would not take members of the labor and employment practice with her to Ogletree. “I don’t doubt for a minute that the firm’s actions were that of a jilted lover, if you will,” Placide said.
For some reason, Placide said, ethics officials saw their role as fighting the fight for BigLaw. “If it’s a contract dispute, my matter had no place before the bar association,” she said. “I just find it amazing how they’ve taken the facts and twisted them.”